This exclusive interview with Nobel Prize winner, Paul Krugman was recorded in Silicon Valley. Dr. Krugman was in town to deliver a lecture as part of the Foothill College Celebrity Forum Series. This segment is titled: Will Climate Legislation Kill the Economy? Click here for video
Alison van Diggelen: Paul thank you very much for joining me today on Fresh Dialogues.
Paul Krugman: OK. Good to be doing this.
Alison: Now some people are saying, climate legislation is going to kill the economy. What do you say to that Paul?
Paul: Well, a lot of people have done serious work in trying to figure this out. Now, to some extent it will be unknown territory: we don’t know what happens when you set the price of carbon significantly higher than it is now, but the economy has got a lot of flexibility. We have precedent. We had the problem of acid rain and we introduced a cap and trade system – SO2 permits – and a lot of people said it was going to kill the economy…terrible stuff. In fact it turned out that dealing with it was cheaper than most estimates had suggested before hand. Given the incentives, the private sector found ways to generate a whole lot less acid rain.
So current estimates are that if we did something like the legislation that the House has already passed, that ten years from now it would be maybe one third of a percentage point off GDP. And 40 years from now, when the constraints would be much stiffer, it would be something like 2% off GDP, relative to what it would otherwise have been. So if you think about what it would do to the growth rate, it’s minimal. We don ‘t know if these numbers are right, but if history is any guide, they’re probably too pessimistic. It’s just not a big deal.
Alison: Let’s talk about your column, Paul… Now you didn’t pull any punches with the Bush administration. You talked last night about the Bush White House being evil and stupid. What is your characterization of the Obama White House?
Paul: Oh, they’re good guys and they’re smart but just not as forceful as I’d like. It’s a world of difference. When I argue with them in my column this is a serious discussion. We really are in effect speaking across the transom here…
Alison: Is it really a dialogue, are you hearing back from them?
Paul: Ben Bernanke doesn’t call me up but is aware of what I’m writing… people in the administration do call me. I’m never going to be an insider type but at this point I do have genuine contact with both the White House and with congressional leadership. It’s no longer this sort of Cold War as it was during the Bush Years.
Alison: Some people describe your writing as having a missionary zeal. Where does that come from Paul. Can you trace that back?
Paul: Oh. Gosh…I have to say that during the Bush Years, if you didn’t feel passionate that we had to change things, there was something wrong with you…
Alison: You didn’t have a pulse?
Paul: Right. So..before that, I was in fact a pretty cool…uh…
Alison: A cool dude…?
Paul: A pretty cool technocratic sort of writer. I had some fun but I wasn’t crusading. So that is what changed it. And now, I’m trying to make this progressive moment in American history a success. So that’s where I’m pushing.
Alison: So you feel the missionary zeal is gone now, or is it just redirected?
Paul: It’s not the same. There was the sheer.. OMG what a horrible thing…we need to alert people as to what’s going on…I’m still trying to get stuff to happen…it’s less doom laden maybe than it was in the Bush years. But stuff has to happen….I’m still pretty passionate about the column.
Alison: And do you feel you’re more effective as a columnist than inside the government?
Paul: Oh yeah! That’s a personal….you have to know who you are…know what you’re good at. I’m not a…being an effective government official, you have to do bureaucratic maneuvering, be pretty good at being polite at the appropriate moment… you have to be reasonably organized…I’m none of those things.
Alison: An honest man.
Paul: I can move into a pristine office and within three days it will look like a grenade went off.
Paul: You really don’t want me doing that sort of thing.
Alison: Right. Paul Krugman, thank you so much for taking the time. I really appreciate it.
Paul: Thank you so much.
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This exclusive interview with Nobel Prize winner, Paul Krugman was recorded on November 12, 2009 in Silicon Valley. Dr. Krugman was in town to deliver a lecture as part of the Foothill College Celebrity Forum Series. Here is the transcript of Part Two: On China and Climate Change. To listen to this interview click hereand or watchvideo (coming soon)
Alison van Diggelen: Paul thank you very much for joining me today on Fresh Dialogues.
Paul Krugman: OK. Good to be doing this.
Alison: Talking about other countries, Spain took the lead… Denmark is taking the lead… China is now way ahead of us in certain clean energy technologies. Do you feel that we’ve lost eight years and we have at least eight years to catch up? Is it feasible we can catch up?
Paul: It’s always feasible. You don’t want to get too hung up on the specific sexy technologies. I guess the Danes are ahead of us in building wind turbines. But a lot of what we’re going to be doing on the environment is going to be… insulation, clever urban design to minimize energy loss. That’s all stuff that’s coming along and look – the history of information technology has said very clearly that nobody gets a monopoly for very long… I don’t get anxiety about it. I’m just more concerned that we won’t do what we need to do to protect the environment.
Alison: How big is the role of government? Ultimately it’s the private sector investment that’s going to make the substantial investment…
Paul: But the government has to provide the incentives…what we have now is the economic concept of an externality…if you have something where you impose costs on other people but you don’t have any incentive to reduce those costs, bad stuff happens. And climate change is the mother of all externalities. It’s a gigantic thing and the private sector by itself is not going to deal with it. Left without any government intervention, we’re just going to basically par-boil the planet, right?
So what you have to do is have a set of rules in place. Now the idea is for it to be market oriented. Yes, there can be some public research, some public investment, some things will have to be done directly by government… but mainly put in a cap and trade system – put a price on greenhouse gas emissions and then let the private sector do its stuff.
Alison: Right. Why is it you favor a cap and trade system over a straight carbon tax?
Paul: Oh, there are a couple of reasons. One is, right now, cap and trade looks like it might pass Congress and a direct tax will not. Partly that’s because cap and trade is relatively well suited to paying off the industry groups, right? We live in the real world. By handing out some of the licenses, at least in the first decade or so, you make it easier to swallow.
International coordination is easier with cap and trade. If we say to the Chinese – well we want you to have a carbon tax – how can we really tell it’s enforced? But if we negotiate with the Chinese that they will have total CO2 emissions of so much, we can monitor pretty well whether that’s actually happening. So that’s a lot easier to envision an international agreement with cap and trade.
So, I would take a carbon tax if…
Alison: If it were politically feasible?
Paul: It’s not clear to me that it’s even superior. But it would be OK, certainly. The fact is, cap and trade could be a bill by this time next year. A carbon tax is like single payer health care. It’s not going to happen this decade and I want something to actually happen now.
Alison: Paul Krugman, thank you very much I really appreciate your taking the time.
Paul: Thank you so much.
Check back soon for more interview segments on the stimulus package, what gave him that “missionary zeal” to write such fervent columns in the New York Times, and whether the green economy can be our salvation.
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This is a transcript of Part Two of my interview with Bloom Energy CEO, KR Sridhar. The interview was recorded on September 30, 2009 at the Bloom Energy headquarters in Silicon Valley, California. To listen to the interview and read the original post, click here.
We join the conversation as we are discussing the pricing of the Bloom Box.
Alison van Diggelen: KR, thank you for joining me today on Fresh Dialogues.
KR Sridhar: You’re welcome.
Alison: I appreciate your taking the time. So let’s talk about how affordable it (the Bloom Box) might be…I’ve read that $10,000 is a target…
KR: Don’t use any numbers.
Alison: Is this all speculation?
KR: That’s all speculation. So all that I can simply tell you is: if it needs mass market adoption, it needs to be affordable. And affordability is already set in the marketplace because today you buy electrons and you pay a certain price. If I offer you all the advantages of the kind of device I’m talking about, and you have to pay the same price you’re paying your local utility, then it’s affordable to you. So that goal is there. Our goal is clearly to make it affordable; if it’s not affordable, it’ll be the niche market, it’ll be a Tesla…
Alison: Right. And your goal is to make it absolutely affordable?
Alison: A Honda Civic? I like that analogy. That’s great. Let’s talk about barriers to entry. You’re notoriously in stealth mode. Are there high barriers to entry to this? How many Ph.D.s do you have working on it?
KR: Absolutely – very high barriers to entry. The high barriers to entry come (from) – it’s a very complex interdisciplinary field; it requires knowledge not just in one area, in a significant number of engineering, science, material science disciplines…and the development of all the technology, the process know-how is fairly complex…and a significant amount of capital – and I can’t give you the number – that needs to be invested over a long period of time, to get it to where it needs to be. Those become the barriers to entry. But clearly, it’s a huge enough market that other people will try.
Alison: And how many Ph.D.s do you have on your team, working on this problem?
KR: Let’s say it’s in the hundred range.
Alison: It’s in the hundred? And I assume, this being Silicon Valley, people from around the world.
KR: Around the world.
Alison: You’re getting the best talent on this problem and they’re presumably all sworn to secrecy…
KR: They’re the best in what they do and that’s why they’re here.
Alison: You filed your first patent in 2003 and I understand there was one filed last year?
Alison: Can you describe the trends from 2003 to now? You’re obviously a very patient man and you’ve talked about your motivations, but can you talk about the whole trajectory? In 2003, when you filed that patent, did you think that by September 2009, you’d be in production?
KR: We’d roughly laid out this timeline in our very first series of fundraising from our investors. For a project of this timescale, we’re probably within two, three quarters of the original projection…and again you need to understand that this is the kind of product that nobody has built before and an industry to support it doesn’t exist…So we’re not just building a company, we’re building all the support infrastructure that needs to be around us. So, given that caveat, if you accept that as the give-or-take, we’re on plan.
Alison: So there must be growing enthusiasm and excitement in this building?
KR: Absolutely. The big thing is the entire Bloom Team, from employees, to investors to board members to everybody else, are real believers in what we do and real believers in the mission of the company. So that alone creates the enthusiasm.
Alison: I bet. You’ve said ‘we want our products to speak before we speak.’ What do you mean by that?
KR: There’s been enough hype of people coming and saying ‘this is what we will do’ …a lot of them have not come to fruition…That doesn’t mean that they did something wrong. It’s just a very difficult problem to solve or somebody would have solved this a long time ago. And for us, we just didn’t want to add to that hype of coming and saying, ‘this is what it’ll do.’
We first wanted to be sure it works…It’s not just that it works, it can be made affordable. It can make a difference. You’re creating a business, you’re creating an industry, so it needs to work, it needs to be a quality product that has reliability, that people will buy. It needs to be the kind of product that makes a difference in somebody’s life to want to buy it. It can be…affordable – there’s a value proposition to it – and at that affordability rate, the business can be successful because it’s making a profit.
Alison: Well KR Sridhar, it’s been a pleasure. Thank you for joining me today on Fresh Dialogues.
KR: Thank you.
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My interview with Guy Kawasaki took place at Garage Technology Partners in Palo Alto, April 8, 2009. To read the summary or listen to the interview, click here
Alison: Guy Kawasaki is a Silicon Valley venture capitalist, cofounder of Alltop, columnist, author and sought after speaker, but is probably best known as Apple’s evangelist. He’s the one who helped launch the Macintosh computer in the 80’s. Guy – thank you for joining me today on Fresh Dialogues
Guy Kawasaki: Sure, sure. It’s a long time ago, the 80’s…
Alison: Yes indeed. So Guy, you have a very loyal following, some even call you a legend, a Silicon Valley legend in our time
Guy: (laughter) it’s a nice word for being over the hill.
Alison: How do you feel about that…that loyal following and being known as a legend?
Guy: Well, I would dispute that I am a legend first of all. I think Wozniak is a legend. I’m flattered, I would not turn it down…but I do not think I deserve it. How’s that?
Alison: Do you feel you need to do more?
Guy: Well…presuming that I’d want to be a legend: yes. But one could make the case that legends don’t have the upfront motivation and desire to be a legend and true legends are after the fact. If you’re listening to this podcast and you’re 18 or 19 year old MBA and you’re saying, ‘I want to be a legend, that’s my goal in life, I think you’re not going to make it. What you should do is create a great product or service…if you do that, maybe you’ll be a legend. The goal is not to be a legend, the goal is to change the world. I could make the case that there are many people who’ve changed the world who are not legends for example…
Alison: Do you feel YOU have changed the world?
Guy: In a small way because I was part of an organization that changed the world: the Mac division, but I would not hold myself out as someone who changed the world.
Alison: Let’s go back to your childhood. You grew up in Hawaii, your father I understand was a fireman, a real estate broker and a state senator.
Guy: In that order…
Alison: Did his constantly reinventing himself, did that rub off on you?
Guy: Well it’s always romantic to look back and say his father reinvented himself so that’s why he’s so flexible or he was abused (not me) and deprived as a child so that’s when he got his toughness and his entrepreneurial spirit or at 12 years old he had the most successful stand in Honolulu…the same thing happens in sports, ‘he was five years old and he was swinging a golf club or shooting baskets.’ But the problem I think with that kind of theory is that there are lots of kids shooting baskets at five right? So one of them becomes a Michael Jordan and everyone says, ‘Yeah – he was shooting baskets at five.’ Well there were ten thousand other kids shooting baskets who did not become Michael Jordan so if the theory is: if you’re shooting baskets at five, you’ll become Michael Jordan: it ain’t that simple.
I’ll tell you what my father did do: with total certainty he taught me not to take any shit from anybody. Without question.
Alison: Good lesson. And how did he teach that Guy?
Guy: As a senator he took on people. He took on unions, he took on the governor…the mayor…he took on people. And that I learned from him, for sure.
Alison: And do you refuse to take shit today from anyone?
Guy: I wouldn’t say anyone. There are a handful of people I do. But generally, I have a very low tolerance and I think it’s only since I turned fifty that I really blossomed in that sense. When I turned fifty I decided that most of my life is over and life is too short and I wasn’t going to take it anymore. So there are things I pass on, there are people I don’t deal with. I just don’t care. I am – particularly in my online presence on Twitter and stuff – there are instances where I should be more empathetic, I should be more explanatory…more ‘whatever’ and I’m not. They can love it or leave it basically.
Alison: And tell me, as a child Guy: what were your influences? What did you want to be when you were five years old?
Guy: I don’t remember. You know…I really think when people say ever since I was five I wanted to be a ‘whatever.’ I think that’s retroactively inventing your memories. I can’t even remember what I wanted to be at five…probably a football player, maybe superman, I dunno…one of the three stooges. I have no idea, I don’t remember.
Alison: But what about that entrepreneurial spirit. Where did it come from? Can you trace it back or did it start at Apple?
Guy: It probably started in the Mac division when I saw people starting software companies, creating these great products…getting the reward and the independence and all that. So…if you interview Richard Branson, ask him at age five, did you always want to own an airline and fly…I doubt it. Richard Branson told me the story of the way he decided to get in the airline business…he was stuck in the Virgin Islands and couldn’t get a flight so he chartered an airplane and went to the terminal and said, ‘this plane is going to go from here to wherever and there are X seats, so anybody who wants a seat, it’s X pounds or X dollars each and he filled the flight and he figured: I should be in the airline business.
That’s very different from saying at age five, he would go with his father to the airfield and he always wanted to be a pilot and at fifteen he was the youngest licensed pilot in England and at twenty he flew for the royal Air Force. that’s the romantic version right?
Alison: Right, I get it.
Guy: In fact, he was just pissed off cos he couldn’t get from one island to another in the Virgin Islands.
Alison: Has being pissed off encouraged you to take things on?
Guy: Not really. The better test for the entrepreneur is that you create something that you yourself want to use. Now, it can be in a situation that you’re pissed off, that you think there must be a better way, but I don’t think anger is necessarily the sole mother of entrepreneurship.
Alison: And going back to school days, you majored in psychology. Has that been a useful tool for you?
Guy: Well I suppose you could try to connect the dots: say he majored in psych and now he’s an evangelist, a sales guy a marketing guy and an entrepreneur and he’s very active on social media so let’s draw the dots. You could do that…but the truth is that psych was the easiest major I could find at Stanford.
Alison: Talking about Apple, what would you say is the difference between an evangelist and just a sales and marketing guy?
Guy:The difference between an evangelist and a sales and marketing guy is: an evangelist has the other person’s best interests at heart and a sales person has their own interests at heart. That’s a crucial difference and many sales people will take offence to that (laughter)…and some might even say that the best sales people ARE looking out for their customer, not just themselves, but I would make the case that if a sales person had that attitude, that person is in fact an evangelist. Perhaps has never heard the term.
Alison: And what was it about the Apple products, specifically the Macintosh, that made you feel…
Alison: Evangelistic…I’ve got to help people find this and change their lives…
Guy: Evangelism comes from the Greek words ‘to bring the good news.’ So you have to have a product or service that you believe is good news. I believe the Macintosh was good news…it made you more creative and productive. I probably could not evangelize Vista for example (laughter). It’s not clear to me it’s good news. Now there may be people who believe Vista is good news and they can be evangelists…
So, one of the things is: I think great evangelists are made, they are not born and so you are made an evangelist when you either create or come across something that you view as good news. So anybody can be an evangelist, it’s not a character personality; it’s not a certain gene that’s been activated. It’s not in your DNA.
Alison: And the word evangelist, it has a religious quality about it. Is that relevant in your case? Is religion part of your life?
Guy: Religion is definitely part of my life. But it is not WHY I became a Macintosh evangelist. But yes…the two are not really related.
Alison: Did you ever work closely with Steve Jobs?
Guy: Yes (laughter)
Alison: How was that?
Guy: It was a very interesting, valuable, and unusual experience…um…I owe a lot to him. Arguably, I owe everything to him because I really established my reputation in the Mac division. So, yeah, he is one of a kind.
Alison: And what specifically did you learn from him Guy?
Guy: Many things. I learned that good design is very valuable…I think I learned how far people can be pushed and how much better they can do if you do push them. There are things I learned in the Mac division, not from him. For example I learned that the best product doesn’t always win (laughter) unfortunately. I also learned how much people who believe in your product can help you – and that wasn’t from him either – that was from people who loved the Macintosh.
Alison: Great, and what about Steve Wozniak?
Guy: Steve Wozniak, I never worked directly with, I came in after him. I’ve come to know him, I think he’s the purest form of engineering that there is and I have great admiration for him but I can’t say I ever worked for him.
Alison: Right. And you recently reviewed one of his books, a book about him…
Guy:Yes, Gina Smith wrote a book with him called IWoz and I reviewed it and liked it very much.
Alison: Would you recommend it to entrepreneurs?
Guy: Absolutely. Particularly engineers, because I think it shows the purity of what great engineering is.
Alison: And talking of books, you have written nine books I understand. One of your favorite books – that you recommend on your website – is the Innovator’s Dilemmaby Clayton Christensen. Why is it top of your list Guy?
Guy: It’s because so many companies fall victim to the innovator’s dilemma which is basically if you become successful then there is all this pressure and momentum for you to constantly fix that product, make it better, drive down the cost, and all that stuff. So you’re focused on that because your customers are asking for that, your sales force is asking for that…everybody is asking for that. But truly the innovator’s dilemma is for you to create a product that kills that product and that’s a very hard thing to do, because nobody is asking for it.
If you walk into an Apple store right now, no one is going to say: ‘create a product that will kill a Macintosh.’ Right? And if you ask the sales force, no one is going to say it. But if you don’t do it, somebody else will. And so no one was asking for a product to kill the Apple 2, but that’s what Macintosh did. And so, ironically, as you get more and more successful and you have more and more resources to do more and more things, you can’t…or it’s a very difficult mental leap to do it.
Alison: What specifically can green entrepreneurs learn from that book?
Guy: They can learn, if they’re competing with an existing large company, perhaps insights into how to defeat that large company. Because you always think: wouldn’t it be great to work for that large company? You have infinite money, infinite brand awareness, infinite production and you’d see, it’s not so easy. The grass is browner sometimes. I think that is interesting and it’s also interesting if a green entrepreneur achieves a modicum of success, that you should figure out that you’re going to have an innovator’s dilemma. If you create the ultimate solar panel, then you’re going to drive the cost down, make it more efficient…whatever. And somebody else is going to have a new technology and you’re going to say well we can’t switch to that, because no one is asking for that…
Guy: Imagine all the people who are so dependent on the oil business…they’re the last people who’re going to switch. That’s the innovator’s dilemma.
Alison: Let’s talk about your books. One of your books sounds fascinating to me. It’s called Rules for Revolutionaries; and there’s been a lot said about the green revolution going on right now. You’ve said the greatest role in life is being a revolutionary and making the world a better place. In what ways is that true for you?
Guy: Well, I would like to amend that a little bit. I think in fact the greatest role in life is to be a father or mother. I think that is arguably more valuable. Most entrepreneurs won’t agree with that…
Alison: I agree…
Guy: The second most is to look back on your life and say, I brought a Macintosh to life, I brought Yahoo to life, I brought Cisco to life and I made people’s lives better. Better search, better personal computers, better data access…whatever it is. I don’t see how it can get better than that.
Alison: Let’s talk about your Rules for Revolutionaries. You’ve said that it’s not about 10% better, it’s about jumping the curve and changing the world, so talking about the green revolution, what specific advice would you give green revolutionaries about making the leap and defying common ways of thinking?
Guy: Well, the true test of an entrepreneur for innovation is not to do something 10% better. To use a historical example, if you were in the letter quality daisy wheel (printer) business, you could make a daisy wheel printer that has 10% more fonts, 10% more sizes, 10% faster, 10% cheaper, whatever. But truly, the revolution occurred on the next curve which is the laser printer curve. Now if you’re on the laser printer curve, you’re duking it out, trying to make it cheaper, faster, higher resolution… all that stuff. Then what’s the next curve in the printer business?
So, you could say that in the same way, in the green revolution, to use a facetious example: you could make a shower head that used 10% less water. Is that a revolution? I don’t….No.
Alison: Yeah… good point.
Guy: So, the true test the question is: are you jumping to a new curve, or making a slightly better shower head, are you making a slightly better hybrid, or diesel: that’s the test.
Now, don’t get me wrong: in some places like maybe solar panels, to do a solar panel maybe 10% better is so hard that that IS a curve jump, so it’s not just the 10%, it’s: how hard is what you’re doing? Does it change the game? Because perhaps, by making a solar panel that is 10% better and 10% cheaper, we can go from $100,000 solar panel installations to $10,000 solar panel installations. That is a big deal, right?
Guy: So…it’s all about jumping curves.
Alison: OK, right. You talk specifically about death magnets. Can you describe specifically what challenges and pitfalls someone in the green revolution might face?
Guy: A death magnet, firstly, let me define, is something that, when you encounter it, you know it might kill you, you’ve been told it might kill you, you’ve been warned, etc etc. but you still do it. And it’s because of inertia, momentum, whatever it is.
Alison: can you give us an example?
Guy: In the green revolution?
Alison: In the green revolution if you can.
Guy: I’m not that versed in the green revolution, but let’s suppose it’s an accepted practice that in the solar panel business everybody uses national distributors, with wholesalers, retailers and installers. So you look at that and you say: I have to do it that way too. Then somebody else comes along and says, the problem with that is you don’t control the quality of the installation, you don’t control the people…so what I’m going to do, is something different. I’m going to control from the time you buy the solar panel to the time it’s done on your house. It’s going to be my …whatever. You could make the case that either one of these is going to be a death magnet, I don’t know…in this business, but to say that ‘you always have to use a three tier distribution channel’ might be a death magnet, or to believe that ‘you can control all three tiers and scale’ might be a death magnet.
Alison: Can you give a specific for an industry you know well, so that we can demonstrate this point to entrepreneurs listening? What was a death magnet for Apple?
Guy: When the iPhone came out, they did not let ANY developers write software. Their first response was it has to work as a Safari plug-in. That was a death magnet. The thinking was: we need to control the experience; we need to certify the apps were great and all that kind of stuff, and so we have to force them through using Safari. That was a death magnet. And as you see, when they went away from that – and now there’s tens of thousands of apps – it fundamentally changed the phone.
Using another saying of mine: Let a hundred flowers blossom.
And you know that made the iPhone just more successful? If the iPhone were not an open platform, where you could write software today, I don’t think it would be nearly as successful.
Alison: Mmm. I think that’s fair. And whose decision was it to open it up? Do you know?
Guy: This is one of those retroactive things you’ll never know the truth… maybe Steve Jobs closed it down and he got bludgeoned into opening it up or maybe he closed it down initially because he wanted to ensure the launch was successful and he always intended to open it up. I tend to think that that’s the story we’ll be told…I don’t know if it’s the truth…(laughter).
Alison: Guy Kawasaki, thank you for joining me today on Fresh Dialogues.
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Here’s an extract from my interview at Streaming Media West about online video. September 24, 2008.
Alison van Diggelen: What is it about online video that’s making it so attractive these days? […] Can you expand a little bit on that and the kind of feedback you are getting from your customers?
Alison Jeske from drugstore.com: Definitely when people see products in action they get very excited about it. In the prestige beauty world we get to see exciting new designers like Vena Cava showcased in fashion week, we get to see Oscar Blandi doing “How can I get that second day hair look”,we have Tina Turnbow (our fabulous make-up artist that we work with) showing people how to take a day look to a night look. Those things on the prestige beauty site get our customers really excited. On the drugstore.com side, it’s very new for us. We have just been introducing some funnier videos showcasing toys and games for the holiday, so we’re definitely getting some wordings and interesting feedback from our customers on the drugstore.com side.
Alison: So you’re getting a lot of feedback from your customers?
AJ: It’s early launch, early indications are real positive but on the drugstore.com we’ve had videos for about 2 weeks now, and it’s still real early. We’re measuring impressions we’re getting from the customers and definitely some of the feedback. It’s early to tell on order impact and conversion but it looks promising.
Alison:That’s very exciting. Can you give an idea for how long these video clips are? Are we talking like 30 seconds, or longer than that?
AJ: Typically longer than that. We try to keep our clips to around 1 to 2 minutes but some of the ones we have from Fashion Week on our Beauty.com site can go between 3 and 4 minutes. You want it to be interesting enough to tell someone a story but not too long to where we lose people. So we try to balance that and that’s something we’re testing.
Alison: Do you feel you’re really on the cutting-edge of this, taking videos to the market?
AJ: I think we’re definitely in the early adopters – I think there is a lot of people doing it really well out there – eBags is a great example, REI is doing video. The real mavericks in this that have doing it for quite a while are QVC and the Home Shopping Network , they really kind of started translating their TV shows into the different medium. We’re excited to see where this can take us.
Alison: What are your expectations for this? Do you see being your main focus getting video streaming online?
AJ: We see this as mandatory going forward. Customers are demanding it, and we want to offer all the different ways to help a customer make a choice about a product that they want. We see this as a requirement to stay in the game.
Alison: What key message are you bringing today to the Video Commerce panel (you have a panel of four talking about the big picture)?
AJ: I think some of the key messages are that we still need to measure success. We’re excited about this opportunity but we still have to measure, and we’re still near the early stages. The other thing about video is that it’s that next evolution of going from product reviews where customers can describe right how they feel about a certain product and why they like it. Video brings reviews up to another level where we’re getting to the next evolution in the product life-cycle.
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